Thursday, January 21, 2010

This is not good news for me and my family

Shares of big banks dropped Thursday, led by Morgan Stanley, as President Barack Obama proposed a plan to limit their size and the risks they can take on.

The proposal marks the administration's latest assault on Wall Street in what could mark a return—at least in spirit—to some of the curbs on finance put in place during the Great Depression, according to congressional sources and administration officials.

The White House plan, backed by former Federal Reserve Chairman Paul Volcker, would prevent commercial banks and institutions that own banks from owning and investing in hedge funds and private-equity firms, and limit the trading they do for their own accounts.

I suppose that banks could resort to paying negative interest rates on their customer accounts, seeing as they will need to find other ways to finance branch office locations, ATMs, websites, and FDIC insurance. Good times.

Today, Goldman Sachs CEO Lloyd Blankfein announced record annual profits of $13.4 billion for his bank.

He has repaid the U.S. taxpayer $11.42 billion for taking TARP money he didn’t want.

He will contribute another $6.4 billion in taxes to the general public.

And within weeks, if President Obama gets his way, Blankfein has a good shot at becoming the most hated man in our nation.

Apparently, this is now how we treat success in America. We damn it, and then we punish it by enacting loopy, politically expedient measures such as caps on Wall Street trading and principal investments.

Why is our country so self-destructive?

... does anyone actually believe the new White House war on Wall Street will remedy any of that? I know I don’t.

This war is about politics. It’s about a big election loss in Massachusetts. It’s about pushing the blame for the nation’s misery from Washington onto Wall Street. Is President Obama talking to Tora Bora terrorists or Park Avenue bankers when he says: “So if these folks want a fight, it’s a fight I’m ready to have.”

... Job creation in our economy comes from profits and growing incomes. But here is America’s best-run company almost ashamed of its profits and bragging about how much less it’s paying its people.

...

Sure, Wall Street was way too vulnerable because it was way too leveraged.

But AIG wasn’t a bank. Neither Lehman Brothers nor Bear Stearns took consumer deposits. And the hundreds of billions in losses at Fannie Mae and Freddie Mac — as well as the destruction of Wachovia, Washington Mutual and Countrywide had nothing to do with prop trading.

That was caused by banks lending money to millions of Americans to buy houses they couldn’t afford. You won’t hear much of that coming from Washington. After all, “It’s Actually Your Fault, America” is not a good slogan for a re-election campaign.